Shifting the state's business focus to start-ups and innovation, Gov. Phil Murphy on Monday detailed a new economic vision that includes creating a $500 million venture capital fund to "supercharge" investment and revising tax incentives he's frequently criticized as too generous.

Murphy's plan seeks to return New Jersey to a position of economic prominence while at the same time launching it into a new era. It sets measurable goals for the next decade, including 4 percent wage growth, adding 300,000 jobs and attracting $625 million in venture capital investments by 2025.

"New Jersey will once again be a visionary leader in our national and global economy, period," Murphy said during a speech at ON3, the sprawling development on the former Hoffman LaRoche campus in Clifton and Nutley. "We have all the ingredients; we always have. Now we have a plan."

That plan lays out how Murphy intends to create the "stronger and fairer" economy he's spoken about repeatedly for years. And it could prove pivotal. Although New Jersey has recovered the jobs it lost during the Great Recession a decade ago, the recovery has been lopsided, with wage and employment growth that puts New Jersey in the bottom 10 states, according to research commissioned by the administration.

Governor Phil Murphy gives his address on the economic future of New Jersey, Monday, October 1, 2018, in Nutley.(Photo11: Kevin R. Wexler/NorthJersey.com)

The business climate could stand to heat up, too. A report released last week by the Tax Foundation ranked New Jersey the worst of all 50 states due in part to its nation-leading property taxes, the second-highest-rate corporate income tax in the country and "some of the nation’s worst-structured individual income taxes." In a deal with lawmakers in his first budget, Murphy agreed to raise the corporate tax for four years and raise rates on those earning more than $5 million a year.

The plan Murphy released Monday uses a range of measures designed to stimulate growth. He is proposing a revision of state tax incentives to invest in start-ups and low-income and under-served communities and to redevelop brownfield sites.

The "big idea" tax incentive proposal, he said, is known as the Innovation Evergreen Fund. The $500 million fund would pair venture capital funds with proceeds from competitive auctions of new tax credits to invest in New Jersey-based start-ups.

Venture capital investments in New Jersey dropped by half over the past decade, to $625 million, Murphy said, while other states attracted more dollars. Through the evergreen fund, Murphy aims to double that figure, and in doing so, he said, New Jersey can "become the model for the country."

The tax incentives would replace soon-to-expire programs begun under former Gov. Chris Christie. Murphy has been critical of those tax breaks because, he said, they were too rich to big businesses and did not provide enough of a return to justify their use.

The incentives would be capped to bring awards in line with peer states, Murphy said, and "will prioritize job creation over job retention, and encourage companies to look to our urban communities, where mass transit can bring employees and employers together."

Murphy's replacement incentives would need to be approved by the Democratic-led Legislature. Lawmakers voiced approval of Murphy's approach after his speech, but many details remain unknown and may change as the two sides negotiate.

And while Murphy pushes for his new approach to the economy, Senate President Stephen Sweeney is seeking support for a series of reforms on taxes and spending in an effort to make the state more affordable.

Sweeney, D-Gloucester, did not attend Murphy's speech but said in a statement that he welcomes Murphy's "thoughts and vision on how to grow our economy." He said he'll review the proposals while continuing to work on his tax panel's recommendations "so that we can provide a comprehensive blueprint for the reforms needed for New Jersey’s fiscal and economic strength.”

Sen. Paul Sarlo, the budget committee chairman who sat on Sweeney's tax panel, attended the speech and said afterward that he's "not opposed" to the venture capital fund. The Assembly Budget Committee Chairwoman, Eliana Pintor Marin, also said she was open to considering Murphy's tax incentives.

"We can't be a state that doesn't offer incentive programs when states around us" do, she said.

Assembly Speaker Craig Coughlin, D-Middlesex, attended the speech and said through a spokeswoman that he shares Murphy's vision and will review his proposals with Democrats in his chamber.

Besides the incentives, Murphy offered ideas that don't need legislative approval. The Economic Development Authority will create a new small-business loan program with the goal of helping businesses scale up, he said. And the administration will work to update the regulatory environment to remove roadblocks and streamline the process.

Murphy also plans to create a New Jersey Wind Institute to bring the state, organized labor, colleges and corporations together to harness offshore wind and and support research and training on the industry.

Governor Phil Murphy said New Jersey should be a global leader in wind power as he gave his address on the economic future of New Jersey, Monday, October 1, 2018, in Nutley.(Photo11: Kevin R. Wexler/NorthJersey.com)

"We are on the cusp of doing revolutionary things," Murphy said. "And there is no reason we cannot."

Business community reacts

While business leaders were receptive to Murphy's proposals, they remain concerned about New Jersey's overall affordability and business climate. Michele Siekerka, president and chief executive officer of the New Jersey Business and Industry Association, said that while she is "optimistic" about Murphy's proposals, "we've got to address tax reform at the same time."

And Sen. Steve Oroho, a Sussex County Republican who partnered with Sweeney on the tax panel, said incentives will mean little to businesses if the state continues to rank at the bottom for its business climate.

“We’d be much better off working to create a competitive, predictable tax environment that encourages capital investment by businesses large and small," Oroho said in a statement. "Until we provide the stability that businesses crave, we’ll be disappointed with the results.”

The most ideal outcome, business leaders said after Murphy's speech, would be if Murphy and Sweeney aligned their plans and cut costs while also revamping tax incentives.

Over his first eight months in office, Murphy paid extra attention to the fair side of the "stronger and fairer" equation, leaving Chamber of Commerce President Tom Bracken to wonder when he would start detailing plans for economic strength.

On Monday afternoon, Bracken said it was "probably the best economic speech" he's heard after 50 years in business and government.

"We need a spark," Bracken said. "This is a spark."

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